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On Wednesday in advance of a corporate picnic at the Danbury headquarters of Ethan Allen Interiors, CEO Farooq Kathwari checked in with a few managers.

They had all huddled to confer on the company’s new contract to furnish the overseas homes of U.S. diplomats, a massive tome at the ready to reference U.S. Department of State procurement policies.

If representing a small pipeline to the international market, Kathwari is bent on expanding the company’s overall funnel of furniture exports — particularly to China, where Ethan Allen has been adding design centers similar to its retail model in the United States, with recent tariffs having had an impact on sales.

Ethan Allen held a Danbury picnic Wednesday to recognize the work by its Connecticut employees, with the company employing more than 200 people at its Danbury headquarters and another 100 at the company-owned Ethan Allen Hotel next door.

The company sells its furniture through centers that offer interior design services, including locations in Stamford and Milford, and continues to maintain a Norwalk outlet that has long been slated for closure but continues to operate as a clearance center.

As Kathwari strode the halls of Ethan Allen Wednesday, he walked by walls and cubicle barriers blanketed with analyses of everything from strategies for overall markets to the fate of individual design centers, some slated to be relocated in the coming months or years.

It is all part of a continuing evolution for a distinctly American brand that dates back to the 1935 purchase by Nathan S. Ancell and Theodore Baumritter of a bankrupt furniture factory in Beecher Falls, Vt., with the brothers-in-law moving the manufacturer’s headquarters in 1972 to Danbury from New York City.

Under Kathwari, whom Ancell hand-picked in 1987 to succeed him as CEO, Ethan Allen continues to stay in motion as it adapts to any number of developments in the retail industry. That includes everything from the ongoing tariff skirmish and economic peaks and valleys, to influence of digital channels, including augmented reality apps that help buyers visualize how specific furnishings might look in any one room.

This past spring, Ethan Allen elected to shut down one of its North Carolina manufacturing plants at a cost of 325 jobs. It plans to move the work to Vermont and convert the site into a modernized distribution center at an investment of $3 million, while consolidating a Passaic, N.J. distribution operation there as well.

The company is also undertaking a $5 million expansion of an upholstery plant outside Charlotte, N.C.

Kathwari sees Ethan Allen’s in-house craftsmanship as an important distinction, with the company able to exercise direct quality control for furnishings produced at its U.S. plants and two more in Mexico and Honduras.

The company is in the process of debuting a new line of “relaxed modern” furnishings, on the heels of outdoors lines that take their names from southwestern Connecticut neighborhoods like Redding Ridge and Nod Hill in Ridgefield.

“We don’t make products so that we can make them cheaper and reduce quality,” Kathwari said Wednesday. “We have motivated people — people who take pride in what they do.”

‘A more positive direction’

That pride extends to Danbury, according to Mayor Mark Boughton, with Western Connecticut State University’s business school named for Ancell.

“Ethan Allen has been a strong corporate partner in ... Danbury for decades,” Boughton told Hearst Connecticut Media after swinging through the company picnic on Wednesday. “We proudly display Ethan Allen furniture in the mayor’s office as a symbol of our commitment to them.”

Ethan Allen ranked just inside the top 20 retailers nationally for furniture sales in 2018, as ranked in the annual Furniture Today list of the top 100, with Manchester-based Bob’s Discount Furniture the only Connecticut company placing higher on the list.

Ashley HomeStore widened its market-leading position to $4.5 billion in sales last year, a 9 percent increase that was twice the growth rate of its closest U.S. rival Ikea which had furniture sales of just under $3.5 billion according to Furniture Today.

Among “sole source” retailers selling their own lines of furniture, Ethan Allen is the fourth largest behind Ashley, Sleep Number and La-Z-Boy Furniture Galleries, with Stamford-based Lovesac landing in the top 10 after increasing sales more than 60 percent last year.

Despite a 2 percent decline in Ethan Allen revenue in its third fiscal quarter ending in March — driven by lower sales in China which introduced tariffs in retaliation to those of the United States — Ethan Allen sales were up slightly for the first nine months of its fiscal year to $563 million.

Ethan Allen profits rose 17 percent for the first three quarters of fiscal 2019 to $29 million, the first momentum the company has generated in three years at this point in its financial cycle.

Despite the ongoing uncertainty of the China trade tiff, Ethan Allen is continuing to expand there with an eye on normalization of trade relations at a future date.

“This whole tariff situation did create an issue — people were concerned ... and still are concerned to some degree,” Kathwari said in April on a conference call with investment analysts to review the company’s recent results and outlook. “It would appear to me that the worst is over and we’re moving toward a more positive direction.”